KBC Market Research Desk
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Polish FinMin says no FX interventions planned
CE currencies recover after the Brexit shock
The Central European currencies benefited from better mood and slightly strengthened on Tuesday. The focus however still remains on political factors, namely on talks of EU politicians about the Union in post-Brexit era. It seems that uncertainty remains quite high which should in our view put a cap on prospective gains of the forint and (particularly) the zloty, at least in the shortterm. Polish finance minister Szalamacha reiterated yesterday that the ministry planned no FX interventions to support the zloty and added that he saw the currency to return to pre-Brexit levels (he nevertheless provided no specific horizon).
Regarding government bond yields (10Y), they already have fully recovered from the Brexit shock and for example the Polish yield is even seen at the lowest level since mid May.
As for the rest of the week, the eye-catcher is a meeting of the Czech National Bank. It will be interesting to see how sensitive the Czech central bank currently is to negative risks stemming from the Brexit.
| Currencies | % chng | |
| EUR/CZK | 27.12 | 0.0 |
| EUR/HUF | 316.4 | -0.4 |
| EUR/PLN | 4.42 | -0.9 |
| EUR/USD | 1.11 | 0.4 |
| EUR/CHF | 1.09 | 0.8 |
| FRA 3x6 | % | bps chng |
| CZK | 0.26 | 0 |
| HUF | 0.90 | -1 |
| PLN | 1.67 | -5 |
| EUR | -0.33 | -1 |
| GB | % | bps chng |
| Czech Rep. 10Y | 0.49 | 0 |
| Hungary 10Y | 3.22 | -10 |
| Poland 10Y | 3.02 | -4 |
| Slovakia 10Y | 0.70 | 0 |
| CDS 5Y | % | bps chng |
| Czech Rep. | 44 | 0 |
| Hungary | 178 | -10 |
| Poland | 105 | 0 |
| Slovakia | 44 | 0 |
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This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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